Revenue Ireland’s 2023 Budget on the R&D Tax Credit

The most taxing segment of the R&D Tax Credit scheme for SMEs and Start-Ups has always been the prolonged cash refund structure.

After conducting a Public Consultation on this initiative, the Department of Finance in Budget 2023 has announced a welcomed amendment that will be made to the payment provisions of the R&D tax credit. The existing Irish repayable tax credit regime allows cash to be refunded over a three-year period but new measures to be introduced and phased over the next year will see the first €25,000 of R&D Tax Credit claim paid in the first year. This is indeed great news for small and micro companies which make up two-thirds of claimants.

The move to increase the R&D Tax Credit on qualifying R&D expenditure to 30% for micro and small companies (i.e. those with fewer than 50 employees and annual turnover and/or balance sheet not exceeding EUR 10 million) was hotly anticipated to feature in the budget but again while it had recently been provided for in legislation, there appears to be still no advancement on this which would make a fundamental difference to SME companies.

We will continue to monitor the Irish Revenue’s response to the R&D Tax Credit Program. For further questions regarding the 2023 Budget, please contact Visiativ Ireland Ireland.